Sagicor pushes latest select fund as hedging product with diversification

November 22, 2019

via Jamaica Observer

Sagicor Investments is pushing its Manufacturing and Distribution Select Fund, as a hedging product, which guarantees investors a reasonable rate of return through diversification.

As the initial public offering for sale of up to four billion shares in fund opened on Wednesday, Sagicor is rallying investors to subscribe to the offer because it affords them a hedge against some stock prices falling.

The Manufacturing and Distribution Select Fund, which is priced of $1 each with a minimum purchase of one thousand shares, is Sagicor's newest listed equities fund following the successful Financial Select Fund, which has surpassed expectations on returns on investment, having come on the market in just three months.

On the eve of the opening of the Manufacturing and Distribution Select Fund IPO, Sagicor Investments held an investors briefing marketing the offer, which closes on December 4.

At the briefing Sagicor sought to convince the investing public that the IPO is a wise buy, where the fund will be investing in some of the more profitable companies on the stock market in the business of manufacturing and distribution.

The Manufacturing and Distribution Fund will be investing in 30 companies including Wisynco, which commands 18.30 per cent of the portfolio; Caribbean Cement Company with 14.45 per cent of the portfolio, and Jamaica Broilers, which has a weighting of 8.92 per cent of the portifolio.

The listing includes Carreras with 8.62 per cent; Seprod, 8.26 per cent; Jamaica Producers, 6.31 per cent; LASCO Manufacturing, 4.78 per cent; LASCO Distributors, 2.37 per cent; Fontana, 2.05 per cent and Derrimon with 1.55 per cent.

Research manager at Sagicor Investments, Reynaldo Thompson, pointed out that over the past five years, the manufacturing and distribution stocks on the Jamaica Stock Exchange have recorded 500 per cent returns on investment.

While he doesn't expect such strong growth in the near future, Thompson made the point that “some companies will perform just as strong, while others will perform well but not as good as some others.”

Pointing to the future, the Sagicor Investments research manager disclosed that the fund is projected to have a return on investment of 17 per cent with the prospects looking good for the near term, in particular.
For his part CEO of Sagicor Investments Kevin Donaldson is encouraging investors take advantage of the robust growth taking place on the stock market through this IPO, which affords them the opportunity to invest in not just one, but 30 companies on the stock exchange.

He emphasised that the listed equities funds — both the financial select and the manufacturing and distribution select — are not replacing direct investment in a company on the stock market, but are offering a hedge against investing in a single stock, which carries a greater risk than investing in a group of stock as in both listed equities fund.  

“This is your opportunity to win a piece of the business…and this is the fund that will get you there,” Donaldson declared as he encouraged investors to subscribe to the IPO. He described the select funds as “a gateway to begin the transformation from one stage of wealth to the next.”